Overthinking It

A Captain's Ransom

With the Yankees in the midst of an exciting pennant race, albeit one that’s almost certain to admit them to October, the time might not seem ripe to look ahead to their offseason. Still, given the potential for one particular issue to dominate their between-season planning, perhaps we can be excused for fast forwarding through their title defense for now, if we’re kind enough to rewind when the article is over.

After 16 pinstriped seasons, it’s difficult to conceive of Derek Jeter in another team’s uniform, but the possibility exists that the 36-year-old will resign his commission as Captain (or be honorably discharged) at the conclusion of this season, when the shortstop becomes eligible for free agency. Stories concerning the Yankees’ impending decision about the active face of their franchise have been cropping up for years, but they slowed to a trickle once Jeter decreed that he would no longer discuss his contract status during spring training. Still, despite Jeter’s expressed wish to retire as a Yankee (though not in the Jeff Nelsonsense), and the Yankees’ expressed desire to accommodate him, an avalanche of contract-related articles will follow the final out of the Yankees’ season, whenever it might be recorded.

This is the first time that the Yankees have been faced with the imminent prospect of losing their current on-field leader since Jeter earned a starting role in 1996. With only a single year of arbitration eligibility remaining after the 2000 championship season, the Yankees sprang for a 10-year extension, locking Jeter up through the 21st century’s first decade for a cool $189 million. As 10-year contracts go, Jeter’s current pact has worked out remarkably well for his employers. Since 2000, the shortstop has only once failed to appear in at least 150 games; giving Jeter credit for 2.0 WARP this season (his in-season figure currently stands at 1.6 WARP) pushes his total value over the life of the contract just past 37 wins above replacement. That works out to a return of approximately $5 million per win, roughly the going rate even during these depressed days—and that doesn’t include the surplus that Jeter has provided via his post-season play and unparalleled star power (more on that later).

Even if you’re not inclined to obsess over the precise number of millions that one of today’s richly-rewarded athletes stands to earn, especially before the fact, Jeter’s contract situation should offer plenty of food for thought. Our very own Steven Goldman has been digesting it for years now, both at BP and at one of his other online homes, the Pinstriped Bible. Prior to last season, Steven examined the annals of ancient shortstops with an eye toward Jeter’s prospects for remaining at the position, as well as the Yankees’ chances of winning with him there. Steven found that only a select group of players have managed to stay at shortstop at ages as advanced as Jeter’s, and that even among those few, the attrition rate is high, making any long-term commitment risky business. In addition, the men who have managed to stick at shortstop while nearing 40 were all elite defenders in the mold of Ozzie Smith, Luis Aparicio, and Omar Vizquel, a company to which Jeter can’t be said to belong. As Steven concluded, “The rewards of staying too long at the ball with one's shortstop are both fleeting and few.”

Prior to this season, the dubious outlook for Jeter’s future was at least ameliorated by the fact that he hadn’t yet shown his age in an unmistakable way. However, as Jeter’s potential suitors consider the wisdom of buying into his age-37 season (and beyond), the same can no longer be said, given that Jeter finds himself in the midst of a career-worst offensive showing. That could have been (and was) pointed out in 2008, when Jeter posted a .274 TAv, but the shortstop rebounded with his second- or third-most productive campaign last season. This year, Jeter’s TAv has declined all the way to .256, and given his age, it’s tempting to regard his latest dip not as a trough with an upward slope on the other side, but as the entrance to an abyss that would render Jeter a sunk cost early in the life of his next contract.

Even on the other side of the ball, the quality of Jeter’s work seems to have suffered this season. After regarding his defensive work in a more favorable light for the last two campaigns, a period which followed a renewed commitment to defense on Jeter’s part, the advanced metrics are back to regarding Jeter as the worst-fielding shortstop this side of Yuniesky Betancourt. If Jeter’s glove can no longer handle the middle infield and his bat fails to rebound, he could become a player without a position. As a consequence, his future team could soon find itself searching for another shortstop, while fretting about what to do with the over-the-hill Hall of Famer occupying a roster spot and a space on the bench. As Steven has observed on multiple occasions, employing an aging fan favorite like Cal Ripken or Craig Biggio long past his expiration date does neither the team nor the faltering icon any favors.

Before we forecast Jeter’s prospective payday, we should consider the likelihood of an offensive rebound. Jeter is not striking out or walking at rates much different from those of his productive seasons, but that’s where the similarity between his current line and his classic offensive profile ends. Jeter’s career BABIP is .356; his current BABIP rests at a career-low .298, but his xBABIP, according to Chris Dutton’s calculator, stands at .350. It’s tempting to mentally credit Jeter with those 50+ points of missing actual BABIP, which would bring his numbers in line with their career norms, but that would probably be overly simplistic.

Much of that BABIP shortfall may be attributed to weak contact. Jeter’s line-drive rate is his lowest since batted-ball statistics began to be kept, and his ground ball rate, while always high, has ascended to unprecedented heights. Jeter is hitting the ball on the ground over 65 percent of the time that he puts it in play. In addition, he’s reaching outside the zone more often, seeing fewer pitches, and having shorter at-bats than he has in years previous, as shown by data in the Bloomberg Sports Pro Tool:

That combination of weak contact and poor discipline could be a passing phase, but it could also be the mark of a player with declining bat speed, who’s starting his swing early to compensate and adopting a less discriminating approach as a result (as Frankie Piliere suggested yesterday). A mild rebound certainly isn’t out of the question, but an improvement on defense or a complete return to form with the bat at the age of 37 is unlikely, to say the least, and shouldn’t be taken for granted by a prospective employer.

If Jeter shouldn’t be expected to perform above a two-win level (which isn’t necessarily the case), what sort of salary could he command on the open market? Imagine for a moment that he wasn’t Derek Jeter, lifetime Yankee, media darling, and master of intangibles, but a less marketable player with an otherwise identical performance projection. At the going rate for wins, an annual value over $10 million would likely be considered overpay, and it is hard to imagine a commitment being made for more than two seasons. Even a $10 million AAV might be generous. Consider the case of Marco Scutaro. Coming off of two consecutive seasons in the 6.0-WARP range, Scutaro managed only a two-year, $12.5 million commitment from the Red Sox. Granted, Scutaro lacks Jeter’s Hall-worthy resume, but he’s also nearly a year and a half younger and producing at almost exactly Jeter’s level this season.

In an environment where Scutaro has to settle for single-digit millions (cue the world’s smallest violin), it might seem unrealistic not to expect Jeter to take a drastic pay cut from the $21 million he’s raking in this year. However, even though his best days are almost certainly behind him, Jeter boasts not only a far more impressive pedigree as a player but appreciable ancillary off-field value. Can we quantify what sort of worth Jeter brings to a team’s coffers, above and beyond his on-field contributions? Actually, Vincent Gennaro has already done that work for us, in his 2007 book about the economics of baseball, Diamond Dollars, which happens to feature Jeter on the cover, next to some floating text that reads, “Player $ Value.” Sounds like we’ve come to the right book.

Gennaro incorporates an element called “marquee value” into his player-evaluation framework, which significantly alters the equation in cases like Jeter’s. As Gennaro explains, “Players with marquee value contribute not only to their team’s win total, but also to the value of the team as a brand. They personalize the image of the team and provide a face and a personality to go with a logo, often enabling fans and teams to connect with one another in a meaningful and potentially enduring way.” Obviously, employing a player with impressive marquee value increases annual revenue, in the form of higher gate receipts and increased proceeds from merchandise sales, but it can also mean a more lasting benefit to franchise value. Gennaro incorporated personal qualities (positive image, recognizability, accessibility, and articulateness), performance and continuity factors, and association with team brand into his marquee valuations, all of which worked in Jeter’s favor.

Jeter is the poster boy for marquee value, and as such, Gennaro uses him as an example while running through his calculations. All told, Gennaro set Jeter’s value to the Yankees at $3.9 million, above and beyond any on-field contributions he might make. Jeter’s performance factor has suffered since then, which lowers his marquee value, but in light of inflation, increased continuity and association with the Yankees brand, and his pursuit of his 3,000th hit, it’s not unreasonable to credit him with upward of $5 million in marquee value alone. Essentially, if when the terms of a deal are eventually announced, it seems like the Yankees paid for one more win than they’re likely to get from Jeter’s bat and glove, they may have simply valued his persona and overall package accurately. While Jeter would retain some of his marquee value in any uniform, he’d sacrifice much of it by forsaking the team with which his brand has become identified. Thus, independent of performance, payroll, or position on the win curve, Jeter is worth more to the Yankees than he is to any other club.

That increased worth would explain why the prevailing opinion among baseball insiders seems to be that Jeter won’t be playing for another team next season, despite the fact that the Yankees have proven hesitant to overpay for talent in recent years. When I asked Baseball Prospectus' John Perrotto what he’d heard about Jeter’s financial prospects during his travels on the beat, John responded that while he’s found few people willing to hazard a guess as to the length or AAV of Jeter’s next contract, he’s yet to hear from one who thinks that Jeter might even reach the point of receiving an offer from another employer.

Recently, Mark Feinsand speculated that Jeter might actually get a raise, garnering between $22 and $25 million in each of the next four seasons. It’s difficult to make a figure like that square with Jeter’s worth, even assuming that Gennaro’s marquee value model is conservative. However, the Yankees have certainly shown a recent willingness to pay premium prices to keep their marquee players in pinstripes, inking Mariano Rivera to a 3-year, $45 million dollar deal at an even more advanced age than Jeter (despite the fact that the sabermetric approach to reliever valuation doesn’t see a way for a closer to recoup that kind of value), and handing out a 4-year, $52 million package to Jorge Posada—whose defensive handicaps are even more obvious than Jeter’s—before the 2008 season (despite the fact that catchers aren’t exactly safe bets to age well themselves).

With several lucrative long-term contracts already on the books, the Yankees will need to tread carefully as they enter negotiations with their most prominent player. We know that the Yankees play by different rules (fiscally and figuratively speaking) than the rest of the league, but even they might find it hard to compete while committing a total of $50 million to Jeter and Alex Rodriguez in 2014. Of course, winning is the Yankees’ overriding concern, and even a diminished Jeter might give them a better chance to succeed in 2011 than relying on an internal replacement (Ramiro Pena or Eduardo Nunez, anyone?) or praying that J.J. Hardy gets non-tendered, since the free-agent market offers slim pickings otherwise. Couple that with Jeter’s purported pride, and perhaps a significant discount isn’t in the offing, though one wonders how many years the Yankees will be willing to offer to placate both him and their fan base.

Because BP readers are an informed bunch, I thought it might be worthwhile to enlist your aid in coming up with a realistic estimate of the size and length of Jeter’s next contract. Dave Cameron has been running a “Contract Crowdsource” series over at FanGraphs recently, and gave me his blessing to attempt a similar experiment here for Jeter. If you’re in a general managerial frame of mind, vote in the poll below, and we’ll see whether the wisdom of the crowds can match Brian Cashman dollar for dollar and year for year. I’ll follow up with the results once we have an adequate sample, either in the comments below this article, or a subsequent blog post. Of course, the accuracy of our prognosticative powers can’t be assessed until Jeter signs on the dotted line.

I think Jeter gets a lower AAV, but a healthy list of incentives based around milestones like A-Rod got. Something like 3/$40M with about $20M in incentives so he could get a little more than his current AAV. A nice compromise for both sides.

I can't imagine Jeter accepting less than what the yanks gave Posada. At least the same number of years, and probably slightly higher AAV. I went 4 yrs @ 18 per, partly based on wishful thinking that they don't give him 5 years.

There are some big difference between Posada then and Jeter now, mainly Posada was coming off of one of his best seasons, while Jeter is coming off his worst. If the Yanks didn't hand Posada the money, someone else would have, the Mets were particularly interested.

What team would actually sign Jeter for anything more than $10 million a year, and more importantly, Jeter would want to play for? I can see Sabean of the Giants offer the money thanks to his veteran fetish, but why would Jeter want to play for SF? The only non-Yankees move that would make sense would be Jeter teaming back up with Joe Torre...

I think Jeter needs the Yankee almost as much as they need him. His media image could go downhill very fast otherwise. That's why he'll definitely get a deal worth more than he'll likely produce, but not that crazy...

I'm a Yankee fan. I'm a Jeter fan. But I am torn on what needs to happen here. He is classy, professional, clean cut, and.... rapidly declining. What does he have left? Maybe 1 or 2 more years? Maybe the pending contract situation has him paralysed.

This is what I hope for as a Yankee/Jeter fan - he gets his 4/60 contract (which is what I inputted). He gets to 3000 hits, he wins one more WS and then he retires with one year left on his contract.

Let's not forget what he's worth from a marketing standpoint. He's up there with Cal Ripkin in terms of getting butts in seats and selling shirts. Even KC would pay more that $8mil/2 years for that I suppose.

I put 4 years at $5 mil per. Yes I think it might be that cheap. I think he'll look at Todd Helton's contract extension and try to structure something similar. Besides, $5 mil is a relative bargain for a guy who, in two to three years, be a 2B/SS/DH backup and pinch hitter.

Also, is it possible to do a pitch f/x comparison to see what kinds of pitches that Jeter used to hit for solid contact and is now making weak contact on?

Salaries just aren't the same as they were when Jeter signed his contract. Jeter signed his contract in the recent shadow of Alex Rodriguez's $252 million dollar contract. He can look at former teammates paycuts like Bobby Abreu and Hideki Matsui to see that he can either have a one or two year deal for something more like 8 million, or he can get a contract he retires on that takes him into his 40s. If he really doesn't want to leave the Yankees, I think he'll take the longer, cheaper deal.

Bobby Abreu and Hideki Matsui aren't the right comparables for Derek Jeter, imo. Looking at the contracts given to Mo and Po, you can't expect Jeter to take a 2yr deal, or anything less than 8 figures per year.

I still say the absolute minimum Jeter will be asking for is what Posada got. Theoretically, the Yanks could hardball him since he is also dependent on them (as Adam Hobson mentioned above) but I just don't see it happening with Derek-flippin-Jeter.

Also, is it possible to do a pitch f/x comparison to see what kinds of pitches that Jeter used to hit for solid contact and is now making weak contact on?

Thought this was interesting, so I did some quick and dirty research via my website:

He's hitting off speed pitches on the ground at about the same rate as he did last year (in 2009, 60%, 61%, and 66% of changeups, sliders, and curveballs he put into play were groundballs, 61, 65, and 65 in 2010.)

On fastballs however, Jeter's contact rates vary a little more so.

He is hitting ground balls on 65% of fastballs he puts in play this year, compared to 54% last year.

Part of the problem with this type of deal is that it doesn't account for the marketing value of Jeter. Maury Brown (I think) was discussing this a bit on Twitter, and his value to the Yankees as a promotional piece lifts his value beyond the $5 million range.

I voted for 4 years, $15 million per year. The concern I would have with a 2 year deal, or even a year-to-year deal, is that you might encounter a PR nightmare if you're negotiating a contract when his production bottoms out. With a 4 year deal, you're much more likely to have him retire at the end of the deal, and work out an association with the team (or even part ownership) at that point.

I'm guessing an extension gets done relatively quietly and smoothly this off-season, even if Jeter goes through the motions of filing for free agency. His situation has much more in common with the 2008-09 Andy Pettitte contract talks (which resulted in an incentive-laden deal) than the circus and brinksmanship that surrounded ARod's 2007 opt-out.

My guess is the Yankees overpay -- two years at $14 million per - slotting him in between Rivera at $15 and Posada at $13.1. But it wouldn't surprise me if he goes year-to-year, like Pettitte. As for ownership, even a 1% stake is worth something on the order of $16 million, if Forbes' valuation is in the ballpark. So that would surprise me.

I put 5 years, $105M. That would put him through his age 41 season, just like A-Rod's deal. Also, the AAV would be $21M per, just like his current deal. Seems reasonable to me. Actually, now that I look at it again it seems ludicrous, but this is the Magical Jeter and the Yankees, so in that warped world its reasonable.

He should have threatened to retire after last season. Nobody would have dinged his reputation for it. Could have played it off as retiring a champion. Then the Yanks would have come with checkbook open...4 years / $23 mill.

I came up with three years at $15 million based on the arguments in the article. Then I remembered that this was the deal that Mo got. To me the most imponderable part of the equation is Jeter's pride. He needs a really good rationale to offer when asked what he thought of the deal. And to be at peace with himself. This has much less to do with his computable value than the intangibles of negotiation with a franchise icon. I think parity with Mo works all around.

Hasn't Jeter hinted that he is interested in owning at some point? Last I heard owning a baseball team is pretty expensive, so I bet he's looking for big money. I bet they end up with a shortish length, high salary deal, maybe 2 years at 25 each or 3 years at 20 each (what I put).

You honestly think Jeter will get a contract on the same valuation as Manny Ramirez?

Look, Jeter's an eventual Hall of Famer, a Yankees icon and has been a great shortstop for a long time, but I don't think the Yankees will be that generous. Or if they somehow delude themselves into doing that, they'll have a $20 million bench player in 3 years that they'll be trying to trade off.

We also don't know how the new CBA will change revenue sharing and luxury taxes, which is another reason for the Yankees not to commit to something more expensive.

Brian Cashman has got to be praying that he dosn't get too many clutch hits or go into the stands after a pop-up again in the playoffs. If he has a big post-season, the decline year is forgotten, he's the amazing intangiable man again, and they'll have to give him something close to A-Rod money for well into his 40s.

I have no idea what to vote because I know the Yankees will pay Jeter something insane relative to his on field value, even including $5M/year for marketing value.

He's essentially done as a major league regular. He's never fielded well enough to be a major league shortstop and as he ages he's going to get worse. He might be a -20 or -30 defensively. And he's having trouble catching up with a fastball. As you said, he's a player without a position. With the Jeter name, someone could sign him to be a useful 2B/3B (see Vizquel, Omar) but he won't play there for the Yankees. Net net, he's a 0-2 win player over the next two years before he becomes replacement level.